Strangest taxes in America

Although taxes are one of life’s certainties, they can still surprise you.

Consider the iconic New York bagel: decide to have yours toasted, and it’ll come with a tax. The rationale is that sliced bagels are usually consumed on a café’s or store’s premises—and restaurant meals are taxed, whereas groceries (like a dozen unsliced bagels) are not.

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State governments can be remarkably efficient when it comes to finding creative ways to pick up extra cash, and some of their esoteric taxes affect tourists as well as residents. Whether it’s a tax on a hot-air balloon ride over the plains of Kansas or a lid for a coffee cup sold in Colorado, these strange fees won’t inflict serious damage on your wallet. But they will make you say, “Huh?”

Bagels are a New York institution, but not all are taxed equally. Order yours cut in half or request it toasted or topped with cream cheese, and you’ll pay about 8 cents extra. Sliced bagels are usually consumed on a café or store’s premises—and in many states, restaurant meals are taxed, whereas groceries are not. (A loaf of sliced bread at a bakery comes tax free.)

In Maine, blueberries are big business: the Vacationland State produces 99 percent of our nation’s blueberries, averaging 80 to 85 million pounds per year. If you enjoy some this summer, count on being taxed. Anyone “growing, handling, processing, selling, or purchasing” the famous export must pay up, according to Maine’s state legislature.

While you can bet you’ll be taxed on gambling in many states, Alabama takes a particularly hard line. Buy a deck of playing cards—even for innocuous reasons like keeping the family amused on a road trip—and it comes with a tax of 10 cents per pack. If you consider the tax unjustified, here’s some perspective: sellers pay an additional $1 per pack. On second thought, however, that cost probably gets passed right on to you.

California is known for farmers’ markets, heavenly produce, and restaurants that have long championed what’s fresh and local. And while fresh fruit is duty free, the pre-sliced variety of dubious origin sold in vending machines is not. If you’re somehow compelled to press the button, you’ll pay a staggering 33 percent tax—and honestly, you probably deserve it.

Order a latte to go from a Denver coffee shop, and you won’t have to pay an extra cent for the paper cup. But if you want a lid to prevent that hot liquid from spilling onto your pants (or, you know, burning your lap), that part of the container will be taxed. It turns out Colorado deems coffee lids and napkins to be “nonessential” packaging, which makes them subject to the state’s 2.9 percent tax.

Unlike most amusement park rides, a hot-air balloon lets you linger high above the landscape and actually enjoy the view. But in Kansas, that luxury comes with a tax—unless the balloon isn’t tied down. Untethered, piloted balloons that travel some distance are considered a method of air transportation and so, thanks to the federal Anti-Head Tax Act, are exempt from the state’s amusement tax.

If you’re seeking a more permanent road-trip souvenir, Arkansas may not be the best state to
get inked. As of 2005, all tattoos, body piercings, and even electrolysis hair-removal treatments are subject to Arkansas’s 6 percent sales tax. In retrospect, this makes a sort of sense: Arkansas is officially known as The Natural State.

Bring an extra five singles if you decide to scope out any of Texas’s 200 or so strip clubs. In 2011, club owners challenged the $5 “pole tax” passed in 2007, claiming it violated the right to free speech, but the court ruled it constitutional. The tax has so far raised more than $15 million—a portion of which funds sexual assault prevention programs.

Arrow Tax

(Photo: Randy Faris/CORBIS)

No matter which state you visit, arrows will cost you. In 2012, the feds upped a long-standing excise tax on arrows. Now archery enthusiasts pay the Tax Man an additional 46 cents for arrows 18 inches or longer. Wooden arrows designed for kids are exempt, and the funds go toward wildlife restoration. (If you were wondering, bows are taxed at 11 percent.)

We swear this tax wasn’t implemented on April Fool’s Day. In the Keystone State, coin-operated vacuum vending machines are indeed subject to a “use” tax. So if you like to keep a clean car—or can’t wrap your head around paying a tax on oxygen and nitrogen—it makes sense to exit Pennsylvania before taking yours to the car wash.